The comparative balance sheets of Duong Inc. at the beginning and the end of the
ID: 2428422 • Letter: T
Question
The comparative balance sheets of Duong Inc. at the beginning and the end of the year 2010 appear below.DUONG INC. BALANCE SHEETS
Assets Dec. 31, 2010 Jan. 1, 2010. Inc./Dec
Cash $ 90000 $ 26000 $64000 Inc.
Accounts receivable 182000 176000 6000 Inc.
Equipment 78000 44000 34000 Inc.
Less: Accumulated depreciation (34000) (22000) 12000 Inc.
Total $316000 $224000
Liabilities and Stockholders’ Equity
Accounts payable $ 40000 $ 30000 $10000 Inc.
Common stock 200000 160000 40000 Inc.
Retained earnings 76000 34000 42000 Inc.
Total $316000 $224000
Net income of $88,000 was reported, and dividends of $46,000 were paid in 2010. New equipment was purchased and none was sold. Prepare a statement of cash flows for the year 2010.
Explanation / Answer
Duong Inc
Cash flow statement
Particulars $ $ Cash flows from operating activities: Net income $88,000 Adjustments to reconcile net income to net cash provided by operating activities: (Add) Depriciation 12,000 (Less ) Accounts receivable 6,000 (Add) Accounts payable 10,000 Cash flows from operating activities 104,000 Cash flows from investing activities: Equipment purchased 34,000 Net cash used in investing activities -34,000 Cash flows from financing activities: (Add) Common stock issued 40,000 (Less) Dividends paid 46,000 Net cash used in financing activities -6,000 Net increase in cash 64,000 Cash at beginning period 26,000 Cash at end of the period 90,000